Greater Hudson Bank, N.A. Reports Record Net Income for the 2010 Third Quarter

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Net income of $619,000 for the 2010 third quarter and $1.28 million for first nine months of 2010. Loan portfolio increases 32.2% year to date. Total deposits rise 54.3% for first nine months of 2010.

Greater Hudson Bank, N.A. (the “Bank”) (GHDS:PK), with assets of $251.2 million, today reported record net income for both the three and nine months ended September 30, 2010 of $619,000 and $1.28 million, respectively. This is the Bank’s sixth consecutive profitable quarter since the Bank reported its first net profit for the quarter ended June 30, 2009. Net income per common share for the three and nine months ended September 30, 2010 was $0.06 and $0.13, respectively. Return on average common stockholders’ equity was 7.93 percent for the third quarter of 2010.

“We are extremely pleased with the continued strong performance of our Bank,” commented Kenneth J. Torsoe, chairman of the board of directors of the Bank. “The Bank continues to grow with the support of our local community and with our present balance sheet we believe that we are positioned to take advantage of opportunities to expand our market share and footprint as they present themselves in the future.”

Highlights

Financial highlights as of and for the three months ended September 30, 2010 compared to the September 30, 2009 period are as follows:

  • Total assets increased $88.2 million, or 54.1 percent, to $251.2 million.
  • Total loans, net of unearned discount increased $42.3 million, or 54.8 percent, to $119.5 million.
  • Investments increased $40.4 million, or 60.3 percent, to $107.6 million.
  • Deposits increased $84.4 million, or 65.5 percent, to $213.3 million.
  • Net interest income increased $1.1 million, or 89.9 percent, to $2.3 million.
  • Provision for loan losses increased $350,000 to $375,000, reflecting substantial growth in our loan portfolio.
  • Non-interest expense increased $295,000, or 29.2 percent, to $1.3 million.
  • Net interest margin increased 75 basis points to 3.88 percent.

Financial highlights as of and for the nine months ended September 30, 2010 compared to the September 30, 2009 period are as follows:

  • Net interest income increased $2.8 million, or 88.1 percent, to $5.9 million.
  • Provision for loan losses increased $312,000 to $857,000, reflecting substantial growth in our loan portfolio.
  • Non-interest expense increased $893,000 or 29.3 percent, to $3.9 million.
  • Net interest margin increased 66 basis points to 3.69 percent.
  • Earning assets increased $75.8 million, or 54.6 percent, to $214.6 million.

Eric J. Wiggins, president and CEO of Greater Hudson Bank stated, “Our focus on lending in our market area, providing excellent customer service and competitive deposit rates has enabled us to continue to grow substantially year to date. The Bank remains exceedingly well capitalized and we continue to add to our capital base with our sixth consecutive profitable quarter."

Net interest income increased $1.1 million, or 89.9 percent to $2.3 million for the third quarter of 2010 and $2.8 million, or 88.1 percent to $5.9 million for the nine months ended September 30, 2010 compared to the 2009 third quarter and nine months ended September 30, 2009, respectively. The primary reasons for the increase in net interest income for both 2010 periods were decreases in the Bank’s cost of interest bearing deposits, reflecting the Bank’s ability to manage its cost of funds in this continued low interest rate environment. The increase in the net interest income was also due to an increase in average earning assets of $81.0 million and $75.8 million for the three and nine months ended September 30, 2010 compared to the 2009 comparable periods, respectively. Increases in net interest income were partially offset by the increase in average interest bearing liabilities in both 2010 periods compared to 2009 periods.

Non-interest expense increased $295,000 for the third quarter of 2010 and $893,000 for the nine months ended September 30, 2010 compared to the 2009 periods, respectively. In both periods, the increases were driven by increases in expenses related to salary and benefits, occupancy, marketing and deposit insurance to support the Bank’s growth and expansion into new and existing markets. The increase in non-interest expense for the nine months ended September 30, 2010 was also due to expenses incurred related to other real estate owned.

The Bank’s efficiency ratio improved for both the third quarter of 2010 and the nine months ended September 30, 2010 to 56.8 percent and 65.3 percent, respectively. The improvement in the Bank’s efficiency ratio from the 2009 comparable periods is a result of the Bank’s increased earnings performance combined with the management’s ability to control expenses.

Total deposits increased $84.4 million from $128.9 million at September 30, 2009 to $213.3 million at September 30, 2010. The Bank’s growth in total loans, net of unearned discount of $42.3 million and in total investments of $40.4 million from September, 30, 2009 to September 30, 2010 has been directly supported by the increase in deposits as a result of the ability of the Bank’s loan officers and branch personnel to obtain deposit relationships through business development efforts, competitive rates, and quality customer service.

While our loan portfolio grew significantly, our asset quality also improved. Our non-performing assets declined by $945,000, or 50.9% to $912,000 at September 30, 2010 from $1.9 million at September 30, 2009. Our ratio of nonperforming assets to total assets declined to 0.36% at September 30, 2010 from 1.13% one year ago.

At September 30, 2010, the Bank had $30.8 million in tier 1 capital, which is an increase of $2.2 million from September 30, 2009 and the result of the Bank’s sustained earnings performance during that time. As of September 30, 2010, the Bank's leverage ratio was 12.32 percent. The decrease in the leverage ratio is a result of the Bank’s continued growth.

Greater Hudson Bank, N.A founded in 2002, is headquartered in Middletown, New York and was the first community bank chartered in Orange County, New York in over fifty years. The Bank has 4 branches which are located in Middletown and Warwick, Orange County, New York, Bardonia, Rockland County, New York, and White Plains, Westchester County, New York. The Bank is chartered by the Office of the Comptroller of the Currency and its deposits are insured by the Federal Deposit Insurance Corporation. Further information can be found on the Bank's website at http://www.GreaterHudsonBank.com.

Forward-Looking Statements: This Press Release may contain certain statements which are not historical facts or which concern the Bank's future operations or economic performance and which are to be considered forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Bank cautions that all forward-looking statements involve risk and uncertainties, and that actual results may differ from those indicated in the forward-looking statements as a result of various factors, such as changing economic and competitive conditions and other risk and uncertainties. In addition, any statements in this news release regarding historical stock price performance are not indicative of or guarantees of future price performance.

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